Plan panel likely to lose its resource allocation role and may just become an advisory body.

NEW DELHI: Prime Minister Narendra Modi will soon announce a new look Planning Commission that is likely to have more of an advisory and think-tank type of role, providing inputs for policy making.

The commission is likely to lose the resource-allocation role it enjoys at present as the agency overseeing annual plans.

"Prime Minister will make an announcement on this," Jaitley said on Thursday, when asked what role the BJP government envisaged for the Planning Commission. "Please wait, you will hear soon," he said without elaborating.

The NDA government is yet to announce a new deputy chairman for the Plan panel, fuelling speculation that its role in government may be curtailed.

The Economic Survey, presented in Parliament on Wednesday, has suggested that the budget-making process should be unified at the finance ministry to make it more effective.

"At present in India, a government department gets resources through two mechanisms: the budget process run by the ministry of finance and the budget process run by the Planning Commission. This leads to sub-optimal resource allocation as well as diffused accountability," the Survey had said.

The Independent Evaluation Office (IEO) has said the Planning Commission acted as a "control commission" and should be replaced by a "reforms and solution body" in its report submitted to Modi in June.

IEO recommended that the Planning Commission's role as an allocator of resources to the states should be taken up by the Finance Commission and the distribution of resources among central ministries should be carried out by the finance ministry. Plan spending in the current year is Rs 5.75 lakh crore, 32% of the total government spending. IEO was set up for assessing the effectiveness of government programmes and institutional policies.

IEO recommended that a new think tank be set up with domain knowledge experts to replace the commission. "It is clear that the Planning Commission in its current form and function is a hindrance not a help to India's development. In my experience it is not easy to reform such a large ossified body and it would be better to replace it with a new body that is needed to assist states in ideas, to provide long-term thinking and to help cross-cutting reforms," said IEO director general Ajay Chhibber.